(Yicai Global) Jan. 17 -- Australia has continuously developed economic and trade ties with China, its number one trade partner, amid heightening economic and political frictions. The Australian government should be more appreciative of the long-standing relationship with the world’s second-largest economy.
Australian Prime Minister Malcolm Turnbull will visit Japan tomorrow. During the visit, he is expected to sign a deal about mutual visits of military officials between the two countries, and make long-term arrangements for military personnel and equipment exchanges.
China-Japan relations have deteriorated in recent years, and China has been keeping a close eye on Japan’s rearmament ambitions. There have also been a number of disharmony instances between China and Australia over the past one year. Some Australian politicians and media organizations accused China of “infiltrating” the Australian society, “stealing secrets,” “interfering with Australia’s political affairs” or even “toppling the Australian regime.”
Australian Prime Minister Malcolm Turnbull said he would introduce a new espionage and anti-foreign intervention act, and the Chinese power was singled out for interfering with political decisions in Australia. He even said “Australian people, stand up” in Mandarin during a public speech on Dec. 9. China needs to remind the Australian government to pay more attention to its relationship with its most important trade partner.
The two nations once maintained a very harmonious relationship. Australia established diplomatic ties with China as early as 1972, laying the groundwork for mutually beneficial trade and personnel exchanges. China became the largest market for wool exports from Australia, “a country that rides on the sheep's back,” in the 1980s.
Bilateral trade has developed dramatically since the turn of the century, and today China is by far the largest export market and foreign investor for the Oceanian country. Australia is the only Western economy that has achieved positive growth throughout the past 26 years, and its Asian trade partner has played an indispensable role in this process.
Cultural exchanges between the two countries have also reached an unprecedented level. China has opened 14 Confucius Institutes in Australia. The number of Chinese students in Australia had grown to 260,000 as of the end of 2015, making the country the largest source of international students for Australian universities.
In 2016, some 1.2 million Chinese tourists spent a total of USD7.3 billion in Australia. The number of Chinese tourists visiting Australia would reach 3.3 million by 2026, predicts John Brynby, chairman of the Australia-China Business Council and former governor of Victoria. The countries now have 102 pairs of sister provinces/states and cities. Execution of the free trade agreement in 2015 should have improved the long-term prospects for bilateral relations.
Unfortunately, the issue of discrimination against Chinese students in Australia has surfaced over the last couple of years, and a growing number of investment projects involving Chinese companies were blocked by the Australian government. Some politicians have been adamant in criticizing China for so-called “infiltration” in Australian politics, and Sam Dastyari, who was once touted as the future leader of the Labor Party, and Chinese immigrant real estate developer Huang Xiangmo became their sitting targets.
They accused Dastyari of “plainly acting in the interests of another government or another power” simply because the Labor senator expressed his personal opinions about the conflict in South China Sea. After he was forced to resign last month, many Chinese internet users complained about the “brazenness of the Australian government” in handling frictions with China. So, under the current circumstances, a military deal between Australia and Japan is bound to add to the uncertainty of the situation.
What is behind the recent setbacks in Sino-Australian ties? What caused the political frictions despite the continuous development of bilateral trade? The answer is ‘election politics,’ from the short-term perspective.
Since last June, several members of the Australian parliament were forced to step down after they were exposed to have dual nationality. Consequently, the Liberal–National Coalition lost its narrow lead over the opposition, the Labor Party, and became the minority. To hold on to his office, Turnbull took advantage of media reporting that labeled the Labor senator as a supporter of pro-China policies. Obviously, the goal is to undermine the Labor Party’s reputation among voters so that Liberal Party’s candidates can be elected in the by-election. But whether the decision will jeopardize the country’s long-term economic and diplomatic interests is completely off his radar.
At a deeper level, contradictions between Australia’s China trade policy and political stance toward China can be traced to controversies over the country’s identity and development strategy. Is Australia an Anglo-Saxon nation that belongs to the West, or a member of the Asia Pacific community?
The West socioeconomically was far more developed than East Asia in the 80s, so the choice was self-evident back then. However, with the rise of East Asian countries, especially China, on the international economic and political arena, the choice has become increasingly difficult for Australia, and the matter has perturbed the country’s leaders for many years.
After all, unlike other major Western nations such as the UK, the US and Canada, Australia and New Zealand are isolated islands in the Pacific Ocean with a relatively small population. Their neighboring East Asian countries are the most populous region in the world. Australia wants to benefit from China’s expanding economy, but at the same time it fears being “eaten” by the dragon and losing its Anglo-Saxon identity.
Australians know, deep in their hearts, the future of their country is closely linked to East Asian economies -- countries that are only interested in developing economic and trade ties with the Oceanian nations rather than in tampering with their cultural identity. Ever since the Paul Keating era (1991-1996), if not earlier, far-sighted Australian politicians, business leaders and scholars have advocated seizing the ‘Asian opportunity’ -- in particular, opportunities offered by the fast-growing Chinese economy while maintaining the country’s cultural identity. However, partly because of its historical connections with the British Empire, “an empire on which the sun never set,” Australia is extremely sensitive to “political intervention” by foreign governments, as manifested by the pervasiveness of the White Australia policy during a considerable part of the last century. White-centrism is also to blame for delays in bilateral free trade talks. Australia kicked off the talks with China in the early 2000s, but the agreement was not concluded until 2015.
For many years, with the US extending its influence by pursuing a global strategy, Australia has been practicing fence sitting over the decision as to whether to join the Asia Pacific community or the American-British alliance. This explains the phenomenon that economic and political frictions between China and Australia have escalated over the past two decades despite growing trade figures.
Furthermore, Australian politicians made the wrong bet in the US presidential election in 2016. They unanimously supported Hillary Clinton, only to find that their misjudgment is making it difficult to foster strong ties with the new US president. Therefore, the Australian government has to make a clear break from China to prove its loyalty to the Trump administration.
We value our economic and trade cooperation with Australia. Since 2002, I have been interviewed by mainstream Australian newspapers such as The Australian, The Australian Financial Review and The Sydney Morning Herald on matters concerning the global economy, China’s foreign trade and diplomatic policies, China-Australia trade and political relations. An Australian MP cited my comments at a parliamentary hearing.
I have been working on China-Australia relations for 15 or 16 years, and I understand the mindset of the Australian people. I understand that they are nervous about the historical changes in the world. I understand the struggle they are going through in choosing their national identity and development strategy. But, at the end of the day, they need to face the “cruel” reality no matter how “sexy” they think they are. They may find that the reality is not as cruel as they thought.
Mei Xinyu is a research fellow at Chinese Academy of International Trade and Economic Cooperation, an affiliate of the Ministry of Commerce.
[Yicai Global is committed to providing an open forum to air a diverse range of views. The opinions expressed herein are the author’s alone. Yicai Global has redacted this article to conform to our style and usage guidelines, but neither validates its factual nor endorses its editorial content.]Keywords: Austrilia, Bilateral Relations, Trade, DIPLOMACY, Asia-Pacific